Chapter 1: Exam Questions and Answers
INSTRUCTOR NOTE: Answer Key is found at the end of each chapter
1. What is the industry term used to describe the sum of prices paid by a business’s customers?
A. Daily receipts
B. Profit
C. Profits less expenses
D. Total revenues
Reference Section: Introduction
2. Historically, what concept have hospitality managers chiefly used to calculate their selling prices?
A. Income
B. Revenue
C. Costs
D. Profits
Reference Section: Introduction
3. What is an algebraic equivalent of the formula: Sales = Costs + Profit?
A. Profit = Sales – Costs
B. Costs = Sales + Profits
C. Costs = Profit – Sales
D. Profit = Costs – Sales
Reference Section: The Purpose of Business
4. What is the name for the net value achieved by both parties in a business transaction?
A. Revenue
B. Profit
C. Income
D. Expense
Reference Section: The Purpose of Business
5. What element is not present in a barter economy?
A. Product exchange
B. Money
C. Profit
D. Sellers
Reference Section: The Purpose of Business
6. What is the formula used to calculate an owner’s ROI?
A. Owner’s Original Investment
Owner’s Investment Return = Owner’s Return on Investment
B. Owner’s Investment Return
Owner’s Return = Owner’s Return on Investment
C. Owner’s Return on Investment
Owner’s Original Investment = Owner’s Return on Investment
D. Owner’s Investment Return
Owner’s Original Investment = Owner’s Return on Investment
Reference Section: The Purpose of Business
7. Sandy has 100 hotel rooms to sell. This Saturday night has enough customers to sell 125 rooms so she will be refusing 25 requests for rooms. What is this an example of?
A. Distribution channels
B. Differential pricing
C. Constrained supply
D. Yield management
Reference Section: The Purpose and Design of this Book
8. Which industry was the first to use Yield Management principles?
A. Lodging
B. Foodservice
C. Airline
D. Catering
Reference Section: The Purpose and Design of this Book
9. What is the industry term used to describe the selling of rooms which are not actually available for sale?
A. Overbooking
B. Yield management
C. Revenue management
D. Maximum ADR
Reference Section: The Purpose and Design of this Book
10. What is the formula used to calculate Average Daily Rate?
A. Owner’s Investment
Occupancy Rate = Average Daily Rate
B. Rooms Available for Sale
Occupancy Rate = Average Daily Rate
C. Total Rooms Sold
Total Room’s Revenue = Average Daily Rate
D. Total Room’s Revenue
Total Rooms Sold = Average Daily Rate
Reference Section: The Purpose and Design of this Book
11. Tashia’s hotel sold 175 rooms last night at an ADR of $200.00. Her hotel has 250 rooms. What was Tashia’s occupancy % last night?
A. 87.5 %
B. 70 %
C. 114.3 %
D.80 %
Reference Section: The Purpose and Design of this Book
12. Tashia’s hotel sold 175 rooms last night at an ADR of $200.00. Her hotel has 250 rooms. What was Tashia’s RevPAR last night?
A. $ 140.00
B. $ 35.00
C. $ 125.00
D. $ 160.00
Reference Section: The Purpose and Design of this Book
13. What is the industry term for the average revenue generated by each occupied guestroom during a defined period of time?
A. RevPOR
B. RevPASH
C. RevPAR
D. RevAve
Reference Section: The Purpose and Design of this Book
14. What is the formula used to calculate GOPPAR?
A. Total Revenue – Management Controllable Expenses
Rooms Sold = GOPPAR
B. Rooms Available to Sell
Total Revenue - Management Controllable Expenses = GOPPAR
C. Rooms Available To Sell
Total Management Controllable Expenses = GOPPAR
D. Total Revenue – Management Controllable Expenses
Rooms Available to Sell = GOPPAR
Reference Section: The Purpose and Design of this Book
15. What is the industry term for a customer group which can be readily identified by one or more common characteristics?
A. Comp set
B. STR group
C. Market segment
D. Revenue group
Reference Section: The Purpose and Design of this Book
16. What is a rack rate?
A. The price of rooms when nonrefundable advance purchases are made
B. The price of rooms when no discounts of any type are offered
C. The price of rooms when 0-10% discounts are offered
D. The price for the most expensive room in a hotel
Reference Section: The Purpose and Design of this Book
17. What is:
Total period revenue
(Number of available seats) x (hours of seat availability)
A. The formula for RevPASH
B. The formula for check average
C. The formula for contribution margin (CM)
D. The formula for RevPAR
Reference Section: The Purpose and Design of this Book
18. What is the term used to identify a management philosophy that places customer gain ahead of short-term revenue maximization in revenue management decision making?
A. Revenue enhancement management
B. Yield management
C. Profit yield management
D. Customer-centric revenue management
Reference Section: The Purpose of Revenue Management
19. What is the term used to describe the potential customers to whom a business’s marketing activities and messages are directed?
A. The yield market
B. The comp set
C. The target market
D. The centric market
Reference Section: The Purpose of Revenue Management
20. What is the term used to describe efforts undertaken to encourage travel and tourism to a specific geographic area or attraction?
A. Goal management
B. Destination marketing
C. Yield intention marketing
D. Objective marketing
Reference Section: The Purpose and Design of this Book
Answer Key
1. D
2. C
3. A 4. B 5. B
6. D 7. C
8. C
9. A
10. D
11. B
12. A
13. A
14. D
15. C
16. B
17. A
18. D
19. C
20. B